SECURITIES PURCHASE AGREEMENT

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT, dated as of October __, 2008 (the “Agreement”), among Heartland, Inc., a corporation organized under the laws of Maryland (the “Purchaser”), LEE HOLDING COMPANY, LP, and Gary Lee (the “Sellers”), Lee Oil Company, Inc., a corporation organized under the laws of Virginia (“Lee Oil”), Lee’s Food Mart, LLC, a limited liability company organized under the laws of Tennessee (“Lee Food”), and Lee Enterprises, Inc., a corporation organized under the laws of Kentucky (“Lee,” and together with Lee Oil and Lee Food, the “Companies”).

WHEREAS, the Seller owns an aggregate of ______ shares of common stock, $___ par value, of Lee Oil (the “Lee Oil Shares”), an aggregate of _____ (_____) membership interest of Lee Food (the “Lee Membership Interest”), and an aggregate of ______ (   ) shares of common stock, $___ par value, of Lee (the “Lee Shares,” and collectively with the Lee Oil Shares and the Lee Membership Interest, the “Securities”), which Securities constitute all of the issued and outstanding shares of capital stock of the Companies; and

WHEREAS, the Seller desires to sell to Purchaser, and the Purchaser desires to purchase from the Seller, the Securities for the purchase price and upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows:

1.1   Sale and Purchase of Securities.

Upon the terms and subject to the conditions contained herein, on the Closing Date the Sellers shall sell, assign, transfer, convey and deliver to the Purchaser, and the Purchaser shall purchase from the Sellers, all of the Securities. 

2.1   Amount of Purchase Price.  The purchase price for the Securities, which shall be paid based on the Sellers instruction at the Closing Date, shall be an amount equal to:

(a)           $3,250,000 (US dollars) payable to the Sellers (the “Cash Purchase Price”);

(b)           2,500,000 shares of common stock of the Purchaser, $.001 par value per share, to be issued to the Seller (the “Purchase Price Shares”);

(c)           $3,250,000 (US dollars) evidenced by a subordinated secured promissory notes in the form of exhibit 2.1 attached hereto (the “Note” and collectively with the Cash Purchase Price and the Purchase Price Shares, the “Purchase Price”)

2.2   Payment of Purchase Price.

On the Closing Date, the Purchaser shall pay the Cash Purchase Price to the Sellers, which shall be paid by the delivery to Sellers of a certified or bank cashier's checks, payable to the order of the Sellers or, at the Seller’s option, by wire transfer of immediately available funds into accounts designated by the Sellers.  Further, the Purchaser shall deliver the Note and the Purchase Price Shares within five (5) business days of the Closing Date.

                      3.1            Closing Date .

Subject to the satisfaction of the conditions set forth in Sections 7.1 and 7.2 hereof (or the waiver thereof by the party entitled to waive that condition), the closing of the sale and purchase of the Securities provided for in Section 1.1 hereof (the "Closing") shall take place at the offices of Law Offices of Robert L. Brown, located at 1005 South Main Street, Corbin, Kentucky, 40701, (or at such other place as the parties may designate in writing) on October 1, 2008 or such other date as the Sellers and the Purchaser may designate and such designation shall occur no later than October 1, 2008.  The date on which the Closing shall be held is referred to in this Agreement as the "Closing Date".

3.2   Termination of Agreement .

This Agreement may be terminated prior to the Closing as follows:

(a)   At the election of the Sellers or the Purchaser on or after October 1, 2008, if the Closing shall not have occurred by the close of business on such date provided that the terminating party is not in default of any of its obligations hereunder and the Closing Date shall not have extended by the parties to a date after October 1, 2008;

(b)   by mutual written consent of the Sellers and the Purchaser; or

(c)   by the Sellers or the Purchaser if there shall be in effect a final nonappealable order of a governmental body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; it being agreed that the parties hereto shall promptly appeal any adverse determination which is not nonappealable (and pursue such appeal with reasonable diligence).

3.3   Procedure Upon Termination .

In the event of termination and abandonment by the Purchaser or the Sellers, or both, pursuant to Section 3.2 hereof, written notice thereof shall forthwith be given to the other party or parties, and this Agreement shall terminate, and the purchase of the Securities hereunder shall be abandoned, without further action by the Purchaser or the Sellers.  If this Agreement is terminated as provided herein, each party shall redeliver all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the party furnishing the same.

3.4   Effect of Termination .

In the event that this Agreement is validly terminated as provided herein, then each of the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to the Purchaser, the Companies, the Seller or the Companies; provided, however, that the obligations of the parties set forth in Section 10.4 hereof shall survive any such termination and shall be enforceable hereunder.

The Sellers hereby jointly and severally represent and warrant to the Purchaser that:

                      4.1.            Organization and Good Standing of the Companies .  Each of the Companies is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation as set forth above. The Companies are not required to be qualified to transact business in any other jurisdiction where the failure to so qualify would have an adverse effect on the business of the Companies.

                      4.2.            Authority .

                                (a)           Each of the Companies has full power and authority (corporate and otherwise) to carry on its business and has all permits and licenses that are necessary to the conduct of its business or to the ownership, lease or operation of its properties and assets.

                                (b)           The execution of this Agreement and the delivery hereof to the Purchaser and the sale contemplated herein have been, or will be prior to Closing, duly authorized by the Board of Directors of the Seller and each of the Companies and by the Seller as sole stockholder of the Companies having full power and authority to authorize such actions.

                                (c)           Subject to any consents required under Section 4.7 below, the Sellers and the Companies have the full legal right, power and authority to execute, deliver and carry out the terms and provisions of this Agreement; and this Agreement has been duly and validly executed and delivered on behalf of Sellers and the Companies and constitutes a valid and binding obligation of the Sellers and the Companies, enforceable in accordance with its terms.

                                (d)           Except as set forth in Schedule 4.2 hereto, to the best of Seller’s knowledge, neither the execution and delivery of this Agreement, the consummation of the transactions herein contemplated, nor compliance with the terms of this Agreement will violate, conflict with, result in a breach of, or constitute a default under any statute, regulation, indenture, mortgage, loan agreement, or other agreement or instrument to which the Seller or any of the Companies is a party or by which it or any of them is bound, any charter, regulation, or bylaw provision of the Seller or any of the Companies, or any decree, order, or rule of any court or governmental authority or arbitrator that is binding on the Seller or any of the Companies in any way.

                      4.3.            Shares .

                                (a)           The authorized capital stock of Lee Oil consists of _________ (______) shares of common stock, par value $____ per share, of which _______ (__) shares have been issued to Sellers and constitute the only shares of the capital stock of Lee Oil outstanding.  The authorized capital stock of Lee Food consists of _________  membership interest which membership interests have been issued to Sellers and constitute the only securities of the capital stock of Lee Food outstanding.  The authorized capital stock of Lee consists of _____________ (______) shares of common stock, par value $___ per share, of which ___________ (___) shares have been issued to Seller and constitute the only shares of the capital stock of Lee outstanding.    All of the Securities are duly authorized, validly issued, fully paid and non-assessable.

                                (b)           The Seller is the lawful record and beneficial owner of all the Securities, free and clear of any liens, pledges, encumbrances, charges, claims or restrictions of any kind, except as set forth in Schedule 4.3 hereto, and have, or will have on the Closing Date, the absolute, unilateral right, power, authority and capacity to enter into and perform this Agreement without any other or further authorization, action or proceeding, except as specified herein.

                                (c)           There are no authorized or outstanding subscriptions, options, warrants, calls, contracts, demands, commitments, convertible securities or other agreements or arrangements of any character or nature whatever under which any of the Companies are or may become obligated to issue, assign or transfer any shares of capital stock of any of the Companies, except as set forth in Schedule   4.3 hereto.  Upon the delivery to Purchaser on the Closing Date of the certificates representing the Securities, Purchaser will have good, legal, valid, marketable and indefeasible title to all the then issued and outstanding shares of capital stock of the Companies, free and clear of any liens, pledges, encumbrances, charges, agreements, options, claims or other arrangements or restrictions of any kind (other than any such liens, pledges, encumbrances, charges, agreements, options, claims and other arrangements and restrictions that will be terminated and discharged promptly on Closing upon the receipt by the holders of the same of sums sufficient to pay in full the obligations secured by such liens and other encumbrances, which such liens are attached hereto as Schedule 4.3(c) ).

                      4.4.            Basic Corporate Records .  The copies of the Articles of Incorporation or Organization of each of the Companies (certified by the Secretary of State or other authorized official of the jurisdiction of incorporation), and the Bylaws of each of the Companies, as the case may be (certified within 30 days of the date of this Agreement as true, correct and complete by each of the Companies’ secretary or assistant secretary), all of which have been delivered to the Purchaser, are true, correct and complete as of the date of this Agreement.

                      4.5.            Minute Books .  The minute books of each of the Companies, which shall be exhibited to the Purchaser between the date hereof and the Closing Date, each contain true, correct and complete minutes and records of all meetings, proceedings and other actions of the shareholders, Boards of Directors and committees of such Boards of Directors of each such corporation, if any, and, on the Closing Date, will contain true, correct and complete minutes and records of any meetings, proceedings and other actions of the shareholders, respective Boards of Directors and committees of such Boards of Directors of each such corporation.

                      4.6.            Subsidiaries and Affiliates .  Any and all businesses, entities, enterprises and organizations in which any of the Companies has any ownership, voting or profit and loss sharing percentage interest (the “Subsidiaries”) are identified in Schedule 4.6 hereto, together with the Companies’ interest therein.  Unless the context requires otherwise or specifically designated to the contrary on Schedule 4.6 hereto, “Companies” as used in this Agreement shall include all such Subsidiaries.  Except as set forth in Sections 4.6 or 4.31 or on Schedule 4.6 hereto, (i) the Companies have made no advances to, or investments in, nor owns beneficially or of record, any securities of or other interest in, any business, entity, enterprise or organization, (ii) there are no arrangements through which any of the Companies has acquired from, or provided to, the Seller or their affiliates any goods, properties or services, (iii) there are no rights, privileges or advantages now enjoyed by any of the Companies as a result of the ownership of the Companies by the Seller which, to the knowledge of the Seller or the Companies, might be lost as a result of the consummation of the transactions contemplated by this Agreement.  Each entity shown on Schedule 4.6 is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has full corporate power to own all of its property and to carry on its business as it is now being conducted.  Also set forth on Schedule 4.6 hereto is a list of jurisdictions in which each Subsidiary is qualified as a foreign corporation.  Such jurisdictions are the only jurisdictions in which the ownership or leasing of property by each Subsidiary or the conduct of its business requires it to be so qualified.  All of the outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued, are fully paid and nonassessable, and, except as set forth on Schedule 4.6 hereto, are owned, of record and beneficially, by the Companies, and on the Closing Date will be owned by the Companies, free and clear of all liens, encumbrances, equities, options or claims whatsoever.  No Subsidiary has outstanding any other equity securities or securities options, warrants or rights of any kind that are convertible into equity securities of such Subsidiary, except as set forth on Schedule 4.6 hereto.

                      4.7.            Consents .  Except as set forth in Schedule 4.7 hereto, and to the best of Seller’s knowledge, no consents or approvals of any public body or authority and no consents or waivers from other parties to leases, licenses, franchises, permits, indentures, agreements or other instruments are (i) required for the lawful consummation of the transactions contemplated hereby, or (ii) necessary in order that the Business can be conducted by the Purchaser in the same manner after the Closing as heretofore conducted by the Companies, nor will the consummation of the transactions contemplated hereby result in creating, accelerating or increasing any liability of the Companies.

                      4.8.            Financial Statements .  The Seller has delivered, or will deliver prior to Closing, to the Purchaser copies of the following financial statements (which include all notes and schedules attached thereto), all of which to the best of Seller’s knowledge,  are true, complete and correct, have been prepared from the books and records of the Companies in accordance with generally accepted accounting principles (“GAAP”) consistently applied and fairly present the financial condition, assets, liabilities and results of operations of the Companies as of the dates thereof and for the periods covered thereby:

                      In such Financial Statements, the statements of operations do not contain any items of special or nonrecurring income or any other income not earned in the ordinary course of business except as set forth in Schedule 4.8 hereto, and the financial statements for the interim period indicated include all adjustments, which consist of only normal recurring accruals, necessary for such fair presentation.  There are no facts known to any of the Sellers, the Companies that, under generally accepted accounting principles consistently applied, would alter the information contained in the foregoing Financial Statements in any material way.

                      For the purposes hereof, the balance sheet of the Companies as of June 30, 2008 is referred to as the “Balance Sheet” and June 30, 2008 is referred to as the “Balance Sheet Date”.

                      4.9.            Records and Books of Account . To the best of Seller’s knowledge, the records and books of account of the Companies and of each Subsidiary reflect all material items of income and expense and all material assets, liabilities and accruals, and have been, and to the Closing Date will be, regularly kept and maintained in conformity with GAAP applied on a consistent basis.

                      4.10.                       Absence of Undisclosed Liabilities .  Except as and to the extent reflected or reserved against in the Companies’ Financial Statements (as defined in Section 4.8 of this Agreement) or disclosed in Schedule 4.10 hereto, there are no known liabilities or obligations of the Companies, whether accrued, fixed, absolute, contingent, determined or determinable, and including without limitation (i) liabilities to former, retired or active employees of the Companies under any pension, health and welfare benefit plan, vacation plan or other plan of the Companies, (ii) tax liabilities incurred in respect of or measured by income for any period prior to the close of business on the Balance Sheet Date, or arising out of transactions entered into, or any state of facts existing, on or prior to said date, and (iii) contingent liabilities in the nature of an endorsement, guarantee, indemnity or warranty, other than liabilities and contingent liabilities incurred in the ordinary course of business since the Balance Sheet Date consistent with the Companies’ recent customary business practice, none of which is materially adverse to the Companies.

4.11                       Taxes .

(a)           For purposes of this Agreement, “Tax” or “Taxes” refers to:  (i) any and all federal, state, local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities relating to taxes, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes and escheatment payments, together with all interest, penalties and additions imposed with respect to such amounts and any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity; (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group for any period (including, without limitation, any liability under Treas. Reg. Section 1.1502-6 or any comparable provision of foreign, state or local law); and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor entity.

                                (b)           (i)           Each of the Companies has timely filed all federal, state, local and foreign returns, estimates, information statements and reports (“Returns”) relating to Taxes required to be filed by such Companies with any Tax authority. To the best of Seller’s knowledge, all such Returns are true, correct and complete in all material respects and each of the Companies has paid all Taxes shown to be due on such Returns.  Except as listed on Schedule 4.11 hereto, none of the Companies is currently the beneficiary of any extensions of time within which to file any Returns. The Seller and the Companies have furnished and made available to the Purchaser complete and accurate copies of all income and other Tax Returns and any amendments thereto filed by the Companies in the last three (3) years.

(ii)   To the best of Seller’s knowledge, each of the Companies, as of the Closing Date, will have withheld and accrued or paid to the proper authority all Taxes required to have been withheld and accrued or paid by such company.

(iii)   To the best of Seller’s knowledge, none of the Companies has been delinquent in the payment of any Tax nor is there any Tax deficiency outstanding or assessed against such Companies.  The Companies have not executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

(iv)   To the best of Seller’s knowledge, there is no dispute, claim, or proposed adjustment concerning any Tax liability of the Companies either (A) claimed or raised by any Tax authority in writing and delivered to the Companies or (B) based upon personal contact by any officer of the Companies with any agent of such Tax authority, and to the knowledge of Seller and the Companies, there is no claim for assessment, deficiency, or collection of Taxes, or proposed assessment, deficiency or collection from the Internal Revenue Service or any other governmental authority against the Companies which has not been satisfied.  The Companies are not a party to nor have any Companies been notified in writing that it is the subject of any pending, proposed, or threatened action, investigation, proceeding, audit, claim or assessment by or before the Internal Revenue Service or any other governmental authority, nor does the Companies have any reason to believe that any such notice will be received in the future. The Companies have not filed any requests for rulings with the Internal Revenue Service.  No power of attorney has been granted by any of the Companies or its Affiliates with respect to any matter relating to Taxes of the Companies. To the best of Seller’s knowledge,there are no Tax liens of any kind upon any property or assets of the Companies, except for inchoate liens for Taxes not yet due and payable.

(v)   The Companies have no liability for any unpaid Taxes which has not been paid or accrued for or reserved on the Financial Statements (as defined in Section 4.8 of this Agreement) in accordance with GAAP, whether asserted or unasserted, contingent or otherwise.

(vi)   To the best of Seller’s knowledge, there is no contract, agreement, plan or arrangement to which any of the Companies is a party as of the date of this Agreement, including but not limited to the provisions of this Agreement, covering any employee or former employee of the Companies that, individually or collectively, would reasonably be expected to give rise to the payment of any amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). There is no contract, agreement, plan or arrangement to which any of the Companies is a party or by which it is bound to compensate any individual for excise taxes paid pursuant to Section 4999 of the Code.

(vii)   To the best of Seller’s knowledge, the Companies have not filed any consent agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by the Companies.

(viii)   To the best of Seller’s knowledge, the Companies are not a party to, nor has any obligation under any tax-sharing, tax indemnity or tax allocation agreement or arrangement.

(ix)   None of the Companies’ assets are tax exempt use property within the meaning of Section 168(h) of the Code.

                      4.12.                       Intentionally Left Blank .

                      4.13.                       Intentionally Left Blank .

                      4.14.                       Intentionally Left Blank .

                      4.15.                       Real Property Matters . All real property of the Companies are described in Schedule 4.15 hereto.

                      4.16.                       Leases .  All leases of real and personal property of the Companies are described in Schedule 4.16 hereto, are in full force and effect and: (a) constitute legal, valid and binding obligations of the respective parties thereto enforceable in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting generally the enforcement of creditor’s rights, and (b) have not been assigned or encumbered.  The Companies have performed in all material respects the obligations required to be performed by it under all such leases to date and are not in default in any material respect under any of said leases, except as set forth in Schedule 4.16 hereto. To the knowledge of the Sellers and the Companies, no other party to any such lease is in material default thereunder.  Except as noted on Schedule 4.16 hereto, none of the leases listed thereon require the consent of a third party in connection with the transfer of the Securities.

                      4.17.                       Intentionally Left Blank .

                      4.18.                       Insurance Policies .  There is set forth in Schedule 4.18  hereto a list and brief description of all insurance policies on the date hereof held by the Companies or on which it pays premiums, including, without limitation, life insurance and title insurance policies, which description includes the premiums payable by the Companies thereunder.   Schedule 4.18 also sets forth, in the case of any life insurance policy held by the Companies, the name of the insured under such policy, the cash surrender value thereof and any loans thereunder. To the best of Seller’s knowledge, all such insurance premiums in respect of such coverage have been, and to the Closing Date will be, paid in full, or if not due, properly accrued on the Balance Sheet. To the best of Seller’s knowledge, all claims, if any, made against the Companies which are covered by such policies have been, or are being, settled or defended by the insurance companies that have issued such policies.  Up to the Closing Date, such insurance coverage will be maintained in full force and effect and will not be cancelled, modified or changed without the express written consent of the Purchaser, except to the extent the maturity dates of any such insurance policies expiring prior to the Closing Date.  No such policy has been, or to the Closing Date will be, cancelled by the issuer thereof, and, to the knowledge of the Seller and the Companies, between the date hereof and the Closing Date, there shall be no increase in the premiums with respect to any such insurance policy caused by any action or omission of the Seller or of the Companies.

                      4.19.                       Intentionally Left Blank .

                      4.20.                       Intentionally Left Blank .

                      4.21.                       Compliance With the Law .  To the best of the Sellers’ knowledge, the Companies are not in violation of any applicable federal, state, local or foreign law, regulation or order or any other, decree or requirement of any governmental, regulatory or administrative agency or authority or court or other tribunal (including, but not limited to, any law, regulation order or requirement relating to securities, properties, business, products, manufacturing processes, advertising, sales or employment practices, terms and conditions of employment, occupational safety, health and welfare, conditions of occupied premises, product safety and liability, civil rights, or environmental protection, including, but not limited to, those related to waste management, air pollution control, waste water treatment or noise abatement).  Except as set forth in Schedule 4.21 hereto, the Companies have not been and are not now charged with, or to the knowledge of the Sellers or the Companies under investigation with respect to, any violation of any applicable law, regulation, order or requirement relating to any of the foregoing, nor, to the knowledge of Sellers or the Companies after due inquiry, are there any circumstances that would or might give rise to any such violation. To the best of Seller’s knowledge, the Companies have filed all reports required to be filed by the Companies with any governmental, regulatory or administrative agency or authority.

                      4.22.                       Litigation; Pending Labor Disputes .  Except as specifically identified on Schedule 4.22 hereto:

                                           (i)           There are no legal, administrative, arbitration or other proceedings or governmental investigations pending or, to the knowledge of Sellers or the Companies, threatened, against the Sellers or the Companies, relating to the Business or the Companies or their respective properties (including leased property), or the transactions contemplated by this Agreement, nor is there any basis known to the Sellers or the Companies for any such action.

                                           (ii)           There are no known judgments, decrees or orders of any court, or any governmental department, commission, board, agency or instrumentality binding upon Seller or the Companies relating to the Business or the Companies the effect of which is to prohibit any business practice or the acquisition of any property or the conduct of any business by the Companies or which limit or control or otherwise adversely affect the Companies’ method or manner of doing business.

                                           (iii)           No work stoppage has occurred and is continuing or, to the knowledge of Seller or the Companies, is threatened affecting the Business, and no representation question involving recognition of a collective bargaining agent exists in respect of any employees of the Companies.

                                           (iv)           There are no pending labor negotiations or union organization efforts relating to employees of the Companies.

                                           (v)           There are no known charges of discrimination (relating to sex, age, race, national origin, handicap or veteran status) or unfair labor practices pending or, to the knowledge of the Seller or the Companies, threatened before any governmental or regulatory agency or authority or any court relating to employees of the Companies.

                      4.23.                       Absence of Certain Changes or Events .  Outside the normal course of business, the Companies have not, since the Balance Sheet Date, except as described on Schedule 4.23 hereto:

                                           (i)           Incurred any material obligation or, to the best of the Sellers’ knowledge, liability (absolute, accrued, contingent or otherwise) and any obligation or, to the best of the Sellers’ knowledge, liability incurred by the Companies in the ordinary course is not materially adverse, except for claims, if any, that are adequately covered by insurance;

                                           (ii)           Discharged or satisfied any lien or encumbrance, or paid or satisfied any obligations or liability (absolute, accrued, contingent or otherwise) other than (a) liabilities shown or reflected on the Balance Sheet, and (b) liabilities incurred since the Balance Sheet Date in the ordinary course of business that were not materially adverse;

                                           (iii)           Increased or established any reserve or accrual for taxes or other liability on its books or otherwise provided therefor, except (a) as disclosed on the Balance Sheet, or (b) as may have been required under generally accepted accounting principles due to income earned or expense accrued since the Balance Sheet Date and as disclosed to the Purchaser in writing;

                                           (iv)           Mortgaged, pledged or subjected to any lien, charge or other encumbrance any of its assets, tangible or intangible;

                                           (v)           Sold or transferred any of its assets or cancelled any debts or claims or waived any rights, except in the ordinary course of business and which sale or transfer has not been materially adverse;

                                           (vi)           Disposed of or permitted to lapse any patents or trademarks or any patent or trademark applications material to the operation of its business;

                                           (vii)                      Incurred any significant labor trouble or granted any general or uniform increase in salary or wages payable or to become payable by it to any director, officer, employee or agent, or by means of any bonus or pension plan, contract or other commitment increased the compensation of any director, officer, employee or agent;

                                           (viii)                      Authorized any capital expenditure for real estate or leasehold improvements, machinery, equipment or molds in excess of $5,000.00 in the aggregate;

                                           (ix)           Except for this Agreement, entered into any material transaction;

                                           (x)           Issued any stocks, bonds, or other corporate securities, or made any declaration or payment of any dividend or any distribution in respect of its capital stock; or

                                           (xi)           Experienced damage, destruction or loss (whether or not covered by insurance) individually or in the aggregate materially and adversely affecting any of its properties, assets or business, or experienced any other material adverse change or changes individually or in the aggregate affecting its financial condition, assets, liabilities or business.

                      4.24.                       Employee Benefit Plans .

                                (a)            Schedule 4.24 lists a description of the only Employee Programs (as defined below) that have been maintained (as such term is further defined below) by the Companies at any time during the five (5) years prior to the date hereof.

                                (b)           To the best of Seller’s knowledge, there has not been any failure of any party to comply with any laws applicable with respect to any Employee Program that has been maintained by any of the Companies.  With respect to any Employee Programs now or heretofore maintained by the Companies, the Companies, there has occurred no breach of any duty under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or other applicable law which could result, directly or indirectly in any taxes, penalties or other liability to the Purchaser, the Companies or any affiliate (as defined below). To the best of Seller’s knowledge, no litigation, arbitration, or governmental administrative proceeding (or investigation) or other proceeding (other than those relating to routine claims for benefits) is pending or, to the knowledge of the Companies or Seller, threatened with respect to any such Employee Program.

                                (c)           Except as set forth in Schedule 4.24 attached hereto, to the best of Seller’s knowledge, neither the Companies nor any affiliate has ever (i) provided health care or any other non-pension benefits to any employees after their employment was terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA) or has ever promised to provide such post-termination benefits or (ii) maintained an Employee Program provided to such employees subject to Title IV of ERISA, Section 401(a) or Section 412 of Code, including, without limitation, any Multiemployer Plan.

(d)           For purposes of this Section 4.24:

                                           (i)           “Employee Program” means (A) all employee benefit plans within the meaning of ERISA Section 3(3), including, but not limited to, multiple employer welfare arrangements (within the meaning of ERISA Section 3(40)), plans to which more than one unaffiliated employer contributes and employee benefit plans (such as foreign or excess benefit plans) which are not subject to ERISA; and (B) all stock option plans, bonus or incentive award plans, severance pay policies or agreements, deferred compensation agreements, supplemental income arrangements, vacation plans, and all other employee benefit plans, agreements, and arrangements not described in (A) above.  In the case of an Employee Program funded through an organization described in Code Section 501(c)(9), each reference to such Employee Program shall include a reference to such organization;

                                           (ii)           An entity “maintains” an Employee Program if such entity sponsors, contributes to, or provides (or has promised to provide) benefits under such Employee Program, or has any obligation (by agreement or under applicable law) to contribute to or provide benefits under such Employee Program, or if such Employee Program provides benefits to or otherwise covers employees of such entity (or their spouses, dependents, or beneficiaries);

                                           (iii)           An entity is an “affiliate” of a Companies for purposes of this Section 3.24 if it would have ever been considered a single employer with the Companies under ERISA Section 4001(b) or part of the same “controlled group” as the Companies for purposes of ERISA Section 302(d)(8)(C); and

                                           (iv)           “Multiemployer Plan” means a (pension or non-pension) employee benefit plan to which more than one employer contributes and which is maintained pursuant to one or more collective bargaining agreements.

                      4.25.                       Product Warranties and Product Liabilities .  The product warranties and